Is Free Streaming Music a Pipe Dream?

In the wake of illegal downloading, record labels and third-party companies have both been searching for ways to allow consumers to get a hold of music quickly and, in the case of streaming music, freely. The hope was that advertisement revenue would pay for the costs of licensing music, but it seems that hope was unfounded.

MySpace looks to be purchasing the free music streaming service imeem, but MySpace itself is likely moving to a paid streaming music service. MOG planned on running a free streaming music service, but now is changing to a $5/month subscription. Spotify has delayed plans for their U.S. launch due to complications with launching a free service. The only services that are having success with free streaming music seem to be Lala and iLike, which require payment for a song past the first full listen.

One possibility that seems open to discussion is a subscription fee built into the cost of your Internet or phone plan. This plan seems more likely, as a Sony Music representative was very frank and open in saying Sony, and presumably the other major labels, wanted Spotify to move to paid-only subscription service. So, to check out that new Eminem single, it seems YouTube is still going to be the best bet. [Wired]

If Spotify is as amazing as people say it is, I would consider paying a monthly fee for it. The problem is, once people get something for free, they have a hard time accepting they have to pay for it later.

Hulu is supposedly moving towards a fee-based service starting next year, although some content will remain gratis. I think a fee built into your monthly internet and/or cable television bill is a future reality. Ultimately, all of the excitement over streaming music models just seem like stopgaps toward the endgame: a flat fee for nearly all "catalog" media (music and movies) delivered on-demand to your computer/TV/stereo, and al a carte fees for premium/exclusive content.

The problem is that music sites are competing against p2p downloads - the only way to be competitive is to be free. Unfortunately the record labels don't get this and are stilltrying to get money out of everything they can hold down long enought to throw the lawyers at.